Filed 5/26/20 Catalano v. Hayikian CA2/1

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION ONE

VALENTINA CATALANO,

Plaintiff and Appellant,

v.

PATRICIA HAYIKIAN, as Trustee etc., et al.,

Defendants and Respondents.

B295369

(Los Angeles County

Super. Ct. No. EC066804)

APPEAL from a judgment of the Superior Court of Los Angeles, Willam D. Stewart, Judge. Affirmed.

Gomez & Simone and Josué Cristóbal Guerrero for Plaintiff and Appellant.

Law Offices of Thomas Carter and Thomas P. Carter for Defendant and Respondent Patrician Hayikian, as Trustee, etc.

Manning & Kass, Ellrod, Ramirez, Trester, Fredric W. Trester, Brian Smith, and Jeffrey Tsao for Defendants and Respondents Frank Bravo and The BLVD Group, Inc.

____________________________

Plaintiff and appellant Valentina Catalano (plaintiff) appeals from grants of summary judgment in favor of defendants and respondents Patricia Hayikian (Hayikian), Frank Bravo (Bravo), and The BLVD Group, Inc. (the BLVD Group) (collectively, defendants). The trial court found plaintiff had failed to raise a triable issue that Hayikian had improperly cancelled an agreement to sell a home to Catalano, or that Bravo, who through the BLVD Group served as real estate agent to both Catalano and the trust of which Hayikian was trustee, had breached any fiduciary duties.

We agree with the trial court. Plaintiff failed to remove her loan contingency within the time required under the purchase agreement, thus entitling Hayikian to cancel the agreement. Plaintiff cites no authority that a real estate agent representing both buyer and seller breaches a fiduciary duty by advising one party to assert its lawful rights under an agreement against the other.

Accordingly, we affirm.

FACTUAL BACKGROUND

The record is lengthy. We limit our summary to the facts necessary to the resolution of this appeal.

1. The purchase agreement
2.
In February 2017, plaintiff made an offer to purchase a home at 11848 Vanowen Street in North Hollywood. The home was owned by the Chavez Trust (the trust), of which Hayikian was the trustee. Hayikian’s father, Salvador Chavez, lived in the home.

The trust accepted plaintiff’s offer on February 22, 2017. Bravo, a real estate agent licensed through the BLVD Group, a real estate broker, represented both plaintiff and the trust in the transaction.

Plaintiff and the trust executed a purchase agreement (agreement) using a form provided by the California Association of Realtors. The agreement set the close of escrow at 75 days from acceptance, which was May 8, 2017.

The agreement contained various contingencies, among them that the trust secure a replacement home for Salvador Chavez. The agreement was also contingent on plaintiff qualifying for a loan of $627,000. The agreement provided that, within 21 days after the trust accepted plaintiff’s offer, plaintiff “shall, as specified in paragraph 14, in writing, remove the loan contingency or cancel this Agreement.” 21 days after acceptance was March 15, 2017.

Paragraph 14 of the agreement concerned time periods, removal of contingencies, and cancellation rights. Paragraph 14(B)(3) stated that plaintiff must remove any applicable contingencies by the end of the time specified in the agreement. Paragraph 14(D)(1) provided that if plaintiff did not do so, “then [the trust], after first Delivering to [plaintiff] a Notice to Buyer to Perform . . . , may cancel this Agreement.” Under paragraph 14(B)(4), however, plaintiff could remove a contingency even after the time period for doing so had expired so long as the trust had not yet cancelled the agreement.

Paragraph 14(E) described the notice to buyer to perform. The notice had to be in writing, and plaintiff had two days “after delivery” of the notice “to take the applicable action” before the trust could cancel the agreement. (Capitalization omitted.) Per paragraph 30, those two days were “calendar days after the occurrence of the event specified, not counting the calendar date on which the specified event occurs, and ending at 11:59 PM on the final day.”

We summarize other provisions of the agreement at issue in this appeal. Paragraph 12(A) provided that, “[w]ithin the time specified in paragraph 14B(1), [plaintiff] shall have the right . . . to conduct inspections, investigations, tests, surveys and other studies” of the property.” The “time specified in paragraph 14B(1)” was 17 days after acceptance. Paragraph 14(B)(5) similarly provided that plaintiff “shall have access to the property to conduct inspections and investigations for 17 . . . days after acceptance.” (Boldface & capitalization omitted.)

Also at issue in this appeal, paragraph 7(A)(2) of the agreement required the trust to provide a termite report to plaintiff. Paragraph 14(B)(3) provided that “if any report, disclosure or information for which [the trust] is responsible is not delivered within the time specified in paragraph 14A, then [plaintiff] has 5 . . . days after delivery of any such items . . . to deliver to [the trust] a removal of the applicable contingency or cancellation of this agreement.” (Boldface & capitalization omitted.) The “time specified in paragraph 14A” for the trust’s delivery of any required reports, disclosures, or information was seven days after acceptance.

3. Events during escrow
4.
Plaintiff did not remove the loan contingency by March 15, 2017, although the trust did not cancel the agreement at that time. On March 29, 2017, plaintiff received preliminary approval for a loan from loanDepot, “contingent on a final underwriting approval.” Ultimately, loanDepot denied plaintiff’s loan application on or around April 26, 2017, stating plaintiff had insufficient income.

Plaintiff then applied for a loan from a different lender, PrimeLending, and received a preliminary approval on May 1, 2017. The approval listed the requirements for final approval, including verification of plaintiff’s income and assets, and verification that the property satisfied the lender’s requirements, “including but not limited to, appraisal, title, survey, property inspection, condition, [and] any applicable insurance (i.e. hazard, title and/or flood insurance).”

According to plaintiff’s declaration, she informed Bravo on May 1, 2017 of the preliminary loan approval from PrimeLending. Bravo told her the trust had received a higher all-cash offer on the property and no longer wished to sell to plaintiff.

At 11:23 p.m. that same day, Bravo sent plaintiff a notice to buyer to perform signed by “Chavez Trust,” requesting that she remove all contingencies within two days.

At least one copy of the notice to buyer to perform in the record contains a “Confirmation of Receipt” initialed by Bravo and dated May 3, 2017 (boldface & some capitalization omitted). In deposition, Bravo testified that the date was a typographical error, and should have read May 1.

On May 2 at 11:25 a.m., plaintiff e-mailed Bravo stating, “I received your notice to buyer to perform very late yesterday . . . .” Plaintiff requested an additional week “to remove and complete our financing to purchase.” That same day, plaintiff exchanged e-mails with a loan originator at PrimeLending, who asked her, “Are we getting an extension on time?” Plaintiff replied that she had requested a one-week extension and was waiting for a reply.

At 6:53 p.m. that evening, Bravo replied to plaintiff that he had spoken with “the seller’s [sic]” and “they are staying firm with their notice to perform.”

The next day, May 3, at 9:27 a.m., plaintiff e-mailed Bravo asking, “Once [I have] removed all the contingencies I will be able to get the extra week to complete my financing transaction and access to the property for the appraisal?” At 10:13 a.m., Bravo replied that the sellers would not agree to an extra week: “Please accept the cancellation and take your full deposit back.”

Plaintiff e-mailed back at 1:38 p.m., objecting that the notice to perform was not delivered properly and was missing information, that she had never received the termite report as required by the agreement, and that Bravo and the seller were not cooperating with PrimeLending to allow for an appraisal.

At 11:41 p.m. on May 3, Bravo sent an e-mail attaching a notice of cancellation signed by “Chavez Trust” to plaintiff. Bravo stated in the e-mail that because plaintiff had not obtained a loan or removed her contingencies, the trust had not been able to complete a purchase of a replacement property the trust had found for Salvador Chavez.

On May 4 at 4:39 p.m., plaintiff e-mailed Bravo offering to extend the escrow period to allow the trust more time to find a replacement home for Salvador Chavez. Bravo replied that the sellers had decided not to pursue a replacement property and wished to proceed with the cancellation.

On May 8, plaintiff e-mailed Bravo that cancellation was not an option under the terms of the agreement, and demanded the termite report and access to the property to perform inspections and an appraisal.

An appraiser retained by PrimeLending submitted a declaration stating that she contacted Bravo on May 1, 2017 to schedule an appraisal, and Bravo said he would get back to her. Despite leaving messages, the appraiser did not hear back from Bravo until May 3, when he informed her the transaction was on hold until further notice.

Bravo sent plaintiff a termite report on May 12, 2017.

PROCEDURAL BACKGROUND

On June 7, 2017, plaintiff filed a complaint, alleging causes of action for specific performance and breach of contract against the trust, Salvador Chavez, his son Tony Chavez, and Hayikian, and a cause of action for breach of fiduciary duty against Bravo and the BLVD Group.

On September 8, 2017, plaintiff dismissed without prejudice her claims against the trust, Salvador Chavez, and Tony Chavez, leaving only Hayikian, Bravo, and the BLVD Group as defendants.

On May 10, 2018, the trial court granted Hayikian’s motion to expunge a notice of pendency of action recorded on the property by plaintiff. The trial court found that plaintiff had not shown “the probable validity of her claims.” The property was sold to another buyer in August 2018.

Defendants filed motions for summary judgment. Following a hearing, the trial court granted those motions.

The trial court found that plaintiff had failed to remove the loan contingency within the 21 days required by the agreement or within the two days following receipt of the notice of buyer to perform, and therefore Hayikian had not breached the contract by cancelling it.

The trial court rejected plaintiff’s contentions that Bravo and the BLVD group had breached their fiduciary duty by “sen[ding] the Notice of Cancellation to Plaintiff in bad faith and prior to her deadline to perform” and by “preventing the appraisal of the subject property.” The trial court reiterated that plaintiff had failed to remove the loan contingency within 21 days as required by the agreement, and her attempt to obtain an appraisal between May 1 and May 3 “was already past the date that Plaintiff was required to remove or waive the loan contingency. Plaintiff’s loan documents show that she was not ready, willing, and able to purchase the subject property as she did not obtain a loan in time.”

The trial court entered judgment in favor of defendants. Plaintiff timely appealed.

STANDARD OF REVIEW

“ ‘We review the ruling on a motion for summary judgment de novo, applying the same standard as the trial court.’ [Citation.] ‘Summary judgment is appropriate only “where no triable issue of material fact exists and the moving party is entitled to judgment as a matter of law.” ’ [Citation.] We view the evidence in the light most favorable to the nonmoving party and draw all reasonable inferences in its favor.” (Barenborg v. Sigma Alpha Epsilon Fraternity (2019) 33 Cal.App.5th 70, 76.)

Although we independently assess the grant of summary judgment, our review is governed by appellate procedure, including that “ ‘ “[a] judgment or order of the lower court is presumed correct,” ’ and thus, ‘ “error must be affirmatively shown.” ’ [Citation.] Under this principle, the [appellant] bear[s] the burden of establishing error on appeal, even though [the respondent] had the burden of proving its right to summary judgment before the trial court. [Citation.] For this reason, our review is limited to contentions adequately raised in the [appellant’s] briefs.” (Paslay v. State Farm General Ins. Co. (2016) 248 Cal.App.4th 639, 645.)

DISCUSSION

Plaintiff argues the trial court erred in concluding she had not shown triable issues of material fact regarding her causes of action for breach of contract and breach of fiduciary duty. We disagree.

A. Plaintiff fails to show a triable issue of material fact concerning her cause of action for breach of contract
B.
“The elements of a cause of action for breach of contract are: ‘ “(1) the contract, (2) plaintiff’s performance or excuse for nonperformance, (3) defendant’s breach, and (4) the resulting damages to plaintiff.” ’ ” (Coles v. Glazer (2016) 2 Cal.App.5th 384, 391.)

As the trial court correctly concluded, plaintiff failed to raise a triable issue as to the second and third elements, performance and breach. Pursuant to the terms of the agreement, plaintiff had two calendar days from delivery of the notice to buyer to perform to remove the loan contingency. Because plaintiff acknowledged in a May 2, 2017 e-mail to Bravo that she received the notice a day earlier, May 1, she had until 11:59 p.m. on May 3 to remove the contingency. It is undisputed she did not remove the contingency by that time. Thus, plaintiff did not perform as required under the agreement, and Hayikian did not breach the agreement by cancelling it.

Plaintiff argues that her deadline for performance was later than May 3 at 11:59 p.m., that the notice of cancellation was premature and therefore invalid, and that defendants’ bad faith conduct prevented plaintiff’s timely performance. We discuss each argument in turn.

1. Plaintiff fails to show she was not required to remove the loan contingency by 11:59 p.m. on May 3
2.
Plaintiff contends there is a triable issue as to whether the notice to buyer to perform was delivered on May 1, because Bravo initialed the confirmation of receipt dated May 3. This disregards plaintiff’s own e-mail to Bravo on May 2 acknowledging receipt of the notice on May 1. Indeed, in her appellate briefing plaintiff lists among the “undisputed factual and contractual facts” that the notice was sent to her the night of May 1.

Plaintiff argues defendants’ delivery of the termite report on May 12 extended her time to remove the loan contingency. It is true that the agreement required the trust to deliver the termite report to plaintiff within seven days of acceptance, and the trust did not do so. It is also true that, under paragraph 14(B)(3) of the agreement, “if any report, disclosure or information for which [the trust] is responsible is not delivered within [seven days], then [plaintiff] has 5 . . . days after delivery of any such items . . . to deliver to [the trust] a removal of the applicable contingency . . . .” (Boldface & capitalization omitted.) Thus, to the extent the termite report was applicable to plaintiff’s loan contingency—that is, that the termite report was pertinent to plaintiff’s decision whether to remove the loan contingency—plaintiff had five additional days after receiving the report on May 12 to remove the contingency.

Plaintiff fails to identify evidence that the termite report was pertinent to her decision to remove the loan contingency. Although plaintiff claims that her preliminary loan approval “was subject to [a] . . . termite inspection,” she cites no evidence in the record in support of this. The preliminary approval letter from PrimeLending lists a number of items required for finalization of the loan, but a termite inspection is not among them. In the absence of a showing that the termite report was relevant to plaintiff’s ability to obtain a loan or remove the loan contingency, the five additional days under paragraph 14(B)(3) are of no help to plaintiff.

3. Plaintiff fails to show the notice of cancellation was invalid
4.
Plaintiff argues the notice of cancellation was invalid because Bravo delivered it too early. Plaintiff first contends Bravo delivered it on May 3 at 10:13 a.m. This is incorrect: Bravo sent an e-mail at that time asking plaintiff to “accept the cancellation,” but he did not attach the formal notice at that time. Bravo instead sent the formal notice at 11:41 p.m. on May 3.

Plaintiff argues that delivering the notice of cancellation even at 11:41 p.m. was too early, because her time did not run out until 11:59 p.m. Plaintiff is correct she had until 11:59 p.m. to perform, and had she removed the loan contingency before that time, the notice of cancellation would have been ineffective. Plaintiff, however, did not remove the loan contingency, and does not identify any evidence that receiving the notice 18 minutes early prevented her from removing the contingency. Thus, the notice of cancellation was effective as of 11:59 p.m.

Plaintiff cites no authority that a notice of cancellation of a residential purchase agreement is invalid if delivered 18 minutes before it legally may take effect. Instead, she cites Mackey v. Bristol West Ins. Services of Cal., Inc. (2003) 105 Cal.App.4th 1247 (Mackey), which is distinguishable.

Mackey concerned provisions in the Insurance Code permitting an insurer to “issue a notice of cancellation of an automobile insurance policy because of the insured’s nonpayment of premium,” but requiring that the insured have 10 days following receipt of the notice before the policy was cancelled. (Mackey, supra, 105 Cal.App.4th at pp. 1258–1259.) In Mackey, the defendant insurer issued a notice of cancellation 13 days before the plaintiff insured’s premium was due, “thereby setting the effective date of cancellation on the day following the premium due date.” (Id. at p. 1253.)

The Court of Appeal held that this was improper. The court reasoned that “[t]he obvious purpose of providing strict time limits for advance notice as a prerequisite to cancellation of an automobile insurance policy is to protect the insured against unintended termination of coverage caused by the inadvertent delay of a premium payment, and thus, to give the defaulting policyholder at least a 10-day period to cure the default or secure other insurance.” (Mackey, supra, 105 Cal.App.4th at p. 1261.) This purpose was thwarted by issuing the notice of cancellation well in advance of the insured’s default, thus eliminating much of the 10-day period. (Id. at p. 1262.)

The court also expressed concern that, if the notice of cancellation was sent before the insured defaulted—for example as something “received routinely with each month’s bill”—it might be overlooked and thereby fail to “spur[ ] the insured into action to protect against the potentially catastrophic consequences associated with being an uninsured motorist.” (Mackey, supra, 105 Cal.App.4th at p. 1262.) Accordingly, the court held that a notice of cancellation sent before the insured defaulted was invalid and unenforceable. (Id. at p. 1266.)

In Mackey, the concern was that, by giving notice of cancellation before an insured defaulted, the insured might not realize he needed to take swift action once he actually defaulted and would lose the benefit of the 10-day period permitted under the Insurance Code. Under those circumstances, it would be unjust to enforce the notice of cancellation against the insured.

That concern is not present here, where the triggering event was not the notice of cancellation, but the notice to buyer to perform. The notice to perform was sent well after plaintiff missed the 21-day deadline to remove the loan contingency, and clearly informed plaintiff the agreement was at risk of cancellation if she did not perform within two days. Plaintiff thus had every reason to take swift action to comply with the notice to perform, and indeed attempted to take action as indicated by her e-mails to Bravo requesting an extension and her efforts with PrimeLending to secure her loan. Unlike in Mackey, plaintiff here, having already received the notice to perform, cannot claim to have been blindsided by a delivery of notice of cancellation that was merely 18 minutes premature.

5. Plaintiff fails to show that defendants’ purported bad faith conduct prevented her performance
6.
Plaintiff argues her nonperformance was excused because defendants acted in bad faith by preventing an appraisal of the property in early May. There are two flaws with this argument.

First, under paragraphs 12(A) and 14(B)(5) of the agreement, plaintiff had a right to access the property to conduct inspections and investigations only for the first 17 days after acceptance, a period that ended March 11, 2017. The trust was under no obligation to allow her further access after that time. Although paragraph 14(B)(4) gave plaintiff the right to remove contingencies after the time to do so expired, so long as the trust had not cancelled the contract, that paragraph did not extend the period in which she had a right to access the property.

Second, plaintiff fails to show that defendants’ blocking the appraisal was the cause of her failure to perform under the agreement. She identifies no evidence that, had she been permitted to appraise the property, she would have obtained her loan and removed the contingency by the end of the day on May 3.

According to her preliminary loan approval letter from PrimeLending, finalization of the loan required not only an appraisal, but also, inter alia, verification of plaintiff’s income and assets, as well as verification that the property met PrimeLending’s requirements as to “title, survey, property inspection, condition, [and] any applicable insurance.” Plaintiff identifies no evidence that she satisfied these requirements. The evidence in fact suggests the contrary, given plaintiff’s and PrimeLending’s May 2 e-mail exchange discussing the need for a week-long extension to finalize the loan. Thus, even accepting arguendo that defendants acted in bad faith by preventing the appraisal, plaintiff has failed to raise a triable issue that defendants’ conduct caused her nonperformance.

Plaintiff also argues defendants deliberately failed to remove the contingency regarding finding a replacement property in order to create an excuse to cancel the agreement. Because the trust did not rely on the replacement property contingency to cancel the agreement, but instead relied on plaintiff’s failure to remove her loan contingency, this argument is irrelevant.

C. Plaintiff fails to show a triable issue of material fact concerning her cause of action for breach of fiduciary duty
D.
“ ‘The elements of a cause of action for breach of fiduciary duty are: (1) the existence of a fiduciary duty; (2) the breach of that duty; and (3) damage proximately caused by that breach.’ ” (IIG Wireless, Inc. v. Yi (2018) 22 Cal.App.5th 630, 646.)

Plaintiff argues Bravo and the BLVD Group breached their fiduciary duty by advising the trust to cancel the agreement in order to accept a higher offer from another buyer. We note that plaintiff fails to identify any evidence that Bravo or the BLVD Group advised the trust to cancel, as opposed to the trust deciding on its own to do so, with Bravo merely carrying out the trust’s wishes. Even assuming arguendo that such evidence existed, as set forth above, the trust was fully within its rights under the agreement to cancel given plaintiff’s failure to remove the loan contingency. Plaintiff cites no authority for the proposition that a real estate agent representing both the buyer and seller breaches a fiduciary duty by advising one party to exercise its lawful rights under the purchase agreement.

Plaintiff argues Bravo and the BLVD group misrepresented material facts about the transaction by informing her the trust was cancelling because the trust had been unable to secure a replacement property. Plaintiff contends a replacement property was in fact available, and the true reason the trust cancelled was to accept a better offer.

Assuming arguendo plaintiff’s summary and interpretation of the evidence is accurate, plaintiff fails to explain why the trust’s reason for cancelling the contract was material. As discussed, plaintiff failed to remove her loan contingency, and thus the trust was entitled to cancel. Its motive for doing so was irrelevant. Plaintiff does not argue and fails to identify any evidence that she would have removed the loan contingency or taken other action had she received different information from Bravo or the trust.

Plaintiff argues Bravo and the BLVD group breached their fiduciary duty by preventing her from completing an appraisal of the property. We have explained already why this argument fails in our discussion of plaintiff’s cause of action for breach of contract: Plaintiff had no right to access the property for an appraisal after March 11, 2017, and plaintiff fails to show that the lack of an appraisal caused her nonperformance.

Plaintiff also argues Bravo’s sending the notice of cancellation 18 minutes early “misrepresent[ed] [plaintiff’s] rights under the [a]greement.” Again, plaintiff identifies no evidence that the early notice of cancellation proximately caused plaintiff’s nonperformance. This argument therefore fails.

DISPOSITION

The judgment is affirmed. Defendants are awarded their costs on appeal.

NOT TO BE PUBLISHED.

BENDIX, Acting P. J.

We concur:

CHANEY, J.

WHITE, J.*